[Federal Register Volume 69, Number 16 (Monday, January 26, 2004)]
[Rules and Regulations]
[Pages 3816-3817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1517]



[[Page 3815]]

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Part IV





Department of Labor





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Employee Benefits Security Administration



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29 CFR Part 2590



Mental Health Parity; Final Rule

  Federal Register / Vol. 69, No. 16 / Monday, January 26, 2004 / Rules 
and Regulations  

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AA62


Mental Health Parity

AGENCY: Employee Benefits Security Administration, Department of Labor.

ACTION: Interim final amendment to regulation.

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SUMMARY: This document contains an interim final amendment to modify 
the sunset date of interim final regulations under the Mental Health 
Parity Act (MHPA) to be consistent with legislation passed during the 
108th Congress.

DATES: Effective date. The interim final amendment is effective 
December 19, 2003.
    Applicability dates. The requirements of the interim final 
amendment apply to group health plans and health insurance issuers 
offering health insurance coverage in connection with a group health 
plan beginning December 19, 2003. The MHPA interim final amendment 
extends the sunset date from December 31, 2003 to December 31, 2004. 
Pursuant to the extended sunset date, MHPA requirements apply to 
benefits for services furnished before December 31, 2004.

FOR FURTHER INFORMATION CONTACT: Lisa Campbell, Employee Benefits 
Security Administration, Department of Labor, at (202) 693-8335.

SUPPLEMENTARY INFORMATION:
    Customer Service Information: Individuals interested in obtaining 
additional information on the Mental Health Parity Act and other health 
care laws may request copies of Department of Labor publications 
concerning changes in health care law by calling the EBSA Toll-Free 
Hotline at 1-866-444-EBSA (3272), or access the publications on-line at 
http://www.dol.gov/ebsa, the Department of Labor's Web site. 
Information on the Mental Health Parity Act and other health care laws 
is also available on the Department of Labor's interactive Web pages, 
Health Elaws (http://www.dol.gov/elaws/ebsa/health).

A. Background

    The Mental Health Parity Act of 1996 (MHPA) was enacted on 
September 26, 1996 (Pub. L. 104-204, 110 Stat. 2944). MHPA amended the 
Employee Retirement Income Security Act of 1974 (ERISA) and the Public 
Health Service Act (PHS Act) to provide for parity in the application 
of annual and lifetime dollar limits on mental health benefits with 
dollar limits on medical/surgical benefits. Provisions implementing 
MHPA were later added to the Internal Revenue Code of 1986 (Code) under 
the Taxpayer Relief Act of 1997 (Pub. L. 105-34, 111 Stat. 1080).
    The provisions of MHPA, as originally enacted, are set forth in 
Part 7 of Subtitle B of Title I of ERISA, Chapter 100 of Subtitle K of 
the Code, and Title XXVII of the PHS Act.\1\ The MHPA provisions in 
ERISA generally apply to all group health plans other than governmental 
plans, church plans, and certain other plans. These provisions also 
apply to health insurance issuers that offer health insurance coverage 
in connection with such group health plans. Generally, the Secretary of 
Labor enforces the MHPA provisions in ERISA, except that no enforcement 
action may be taken by the Secretary against issuers. However, 
individuals may generally pursue actions against issuers under ERISA 
and, in some circumstances, under state law.
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    \1\ Part 7 of Subtitle B of Title I of ERISA, Chapter 100 of 
Subtitle K of the Code, and Title XXVII of the PHS Act were added by 
the Health Insurance Portability and Accountability Act of 1996 
(HIPAA), Pub. L. 104-191.
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B. Overview of MHPA

    The MHPA provisions set forth in section 712 of ERISA apply to a 
group health plan (or health insurance coverage offered by issuers in 
connection with a group health plan) that provides both medical/
surgical benefits and mental health benefits. MHPA's original text 
included a sunset provision specifying that MHPA's provisions applied 
to benefits for services furnished before September 30, 2001. On 
December 22, 1997, the Departments of Labor, the Treasury, and Health 
and Human Services issued interim final regulations under MHPA in the 
Federal Register (62 FR 66931). The interim final regulations included 
this statutory sunset date.
    On January 10, 2002, President Bush signed H.R. 3061 (Pub. L. 107-
116, 115 Stat. 2177), the 2002 Appropriations Act for the Departments 
of Labor, Health and Human Services, and Education.\2\ This legislation 
extended MHPA's original sunset date under ERISA, the Code, and the PHS 
Act, so that MHPA's provisions would apply to benefits for services 
furnished before December 31, 2002.
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    \2\ During the 107th Congress, legislation was passed by the 
Senate to substantively amend and expand the provisions of MHPA 
already in place. This legislation was offered as an amendment to 
the provisions of H.R. 3061. The Conference Report accompanying the 
underlying provisions of H.R. 3061 states that instead of the 
amendment proposed by the Senate, the amendment to MHPA contained in 
H.R. 3061 extends the original sunset date of MHPA, so that MHPA's 
provisions apply to benefits for services furnished before December 
31, 2002. H.R. Rep. 107-342, at 170 (2001).
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    On March 9, 2002, President Bush signed H.R. 3090, the Job Creation 
and Worker Assistance Act of 2002 (Pub. L. 107-147, 116 Stat. 21), that 
included an amendment to section 9812 of the Code (the mental health 
parity provisions). This legislation further extended MHPA's original 
sunset date under the Code to December 31, 2003.
    On September 27, 2002, the Department of Labor issued an interim 
final amendment for mental health parity in the Federal Register (67 FR 
60859). The interim final amendment included the new statutory sunset 
date under H.R. 3061, so that MHPA's provisions would apply to benefits 
for services furnished before December 31, 2002. The Department made 
the effective date of this interim final amendment to the regulations 
September 30, 2001.
    On December 2, 2002, President Bush signed H.R. 5716, the Mental 
Health Parity Reauthorization Act of 2002 (Pub. L. 107-313, 116 Stat. 
2457), an amendment to section 712 of ERISA and Section 2705 of the PHS 
Act. This legislation further extended MHPA's original sunset date 
under ERISA and the PHS Act to December 31, 2003. On April 14, 2003, 
the Department of Labor issued an interim final amendment for mental 
health parity in the Federal Register (68 FR 18048). The interim final 
amendment included the new statutory sunset date under H.R. 5716, so 
that MHPA's provisions would apply to benefits for services furnished 
before December 31, 2003.
    On December 19, 2003, President Bush signed S. 1929, the Mental 
Health Parity Reauthorization Act of 2003 (Pub. L. 108-197, 117 Stat. 
2998), an amendment to section 712 of ERISA and Section 2705 of the PHS 
Act. This legislation further extends MHPA's original sunset date under 
ERISA and the PHS Act to December 31, 2004. Like MHPA, this amendment 
to MHPA applies to a group health plan (or health insurance coverage 
offered by issuers in connection with a group health plan) that 
provides both medical/surgical benefits and mental health benefits.\3\ 
As

[[Page 3817]]

a result of this statutory amendment, and to assist employers, plan 
sponsors, health insurance issuers, and workers, the Department of 
Labor has developed this amendment of the interim final regulations, in 
consultation with the Department of Health and Human Services, 
conforming the regulatory sunset date to the new statutory sunset date. 
The Department is also making conforming changes extending the duration 
of the increased cost exemption to be consistent with the new sunset 
date.
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    \3\ The parity requirements under MHPA, the interim regulations, 
and the amendment to the interim regulations do not apply to any 
group health plan (or health insurance coverage offered in 
connection with a group health plan) for any plan year of a small 
employer. The term ``small employer'' is defined as an employer who 
employed an average of at least 2 but not more than 50 employees on 
business days during the preceding calendar year and who employs at 
least 2 employees on the first day of the plan year.
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    Since the extension of this sunset date is not discretionary, this 
amendment to the MHPA regulations is promulgated on an interim final 
basis pursuant to Section 734 of ERISA. This interim final amendment is 
also promulgated pursuant to Section 553(d)(3) of the Administrative 
Procedure Act, allowing for regulations to become effective immediately 
for good cause.

C. Executive Order 12866

    Under Executive Order 12866, the Department must determine whether 
a regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive Order and subject to review by the Office 
of Management and Budget (OMB). Under section 3(f), the order defines a 
``significant regulatory action'' as an action that is likely to result 
in a rule: (1) having an annual effect on the economy of $100 million 
or more, or adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    Pursuant to the terms of the Executive Order, it has been 
determined that this action is not a ``significant regulatory action'' 
within the meaning of the Executive Order. This action is an amendment 
to the interim final regulations and merely extends the regulatory 
sunset date to conform to the new statutory sunset date added by S. 
1929.

D. Paperwork Reduction Act

    The information collection provisions of MHPA incorporated in the 
Department's interim final rules are currently approved under OMB 
control numbers 1210-0105 (Notice to Participants and Beneficiaries and 
Federal Government of Electing One Percent Increased Cost Exemption), 
and 1210-0106 (Calculation and Disclosure of Documentation of 
Eligibility for Exemption). These information collection requests are 
approved through November 30, 2004 and October 31, 2004, respectively. 
Because no substantive or material change is made to the approved 
information collection provisions in connection with this interim final 
amendment, no submission for continuing OMB approval is required or 
made at this time.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551 et seq.). Because this 
amendment to the interim final regulations is being published on an 
interim final basis, without prior notice and a period for comment, the 
Regulatory Flexibility Act does not apply.

F. Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) (UMRA), as well as Executive Order 12875, this interim final 
amendment does not include any federal mandate that may result in 
expenditures by state, local, or tribal governments, and does not 
include mandates that may impose an annual expenditure of $100 million 
or more on the private sector.

G. Congressional Review Act

    This interim final amendment is subject to the Congressional Review 
Act provisions of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (5 U.S.C. 801 et seq.) (SBREFA), and has been transmitted 
to Congress and the Comptroller General for review. This amendment to 
the interim final regulations is not a major rule, as that term is 
defined by 5 U.S.C. 804.

H. Federalism Statement

    Executive Order 13132 (August 4, 1999) outlines fundamental 
principles of federalism and requires the adherence to specific 
criteria by federal agencies in the process of their formulation and 
implementation of policies that have substantial direct effects on the 
states, the relationship between the states, the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. This 
interim final amendment does not have federalism implications as it 
only conforms the regulatory sunset date to the new statutory sunset 
date added by S. 1929.

List of Subjects in 29 CFR Part 2590

    Employee benefit plans, Employee Retirement Income Security Act, 
Health care, Health insurance, Medical child support, Reporting and 
recordkeeping requirements.

Employee Benefits Security Administration

0
 29 CFR part 2590 is amended as follows:

PART 2590--RULES AND REGULATIONS FOR HEALTH INSURANCE PORTABILITY 
AND RENEWABILITY FOR GROUP HEALTH PLANS

0
1. The authority citation for part 2590 is amended to read:


    Authority: 29 U.S.C. 1027, 1059, 1135, 1169, 1181-1183, 1181 
note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c, sec. 
101(g), Pub. L. 104-191, 101 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note); Secretary of Labor's Order 
1-2003, 68 FR 5374 (Feb. 3, 2003).


Sec.2590.712  [Amended]

0
2. Amend Sec. 2590.712 (f)(1), (g)(2), and (i) to remove the date 
``December 31, 2003'' and add in its place the date ``December 31, 
2004.

    Signed at Washington, DC this 16th day of January, 2004.
Ann L. Combs,
Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. 04-1517 Filed 1-23-04; 8:45 am]
BILLING CODE 4510-29-P